Turmoil in Trade: Powell's Response to Trump Tariffs

Federal Reserve Chair Jerome Powell challenges Trump's unexpected tariffs, warning of elevated risks of inflation and slower growth. Powell highlights the uncertainty faced by the economy, as global markets tumble and the Fed assesses the impact on monetary policy.

Federal Reserve Chair Jerome Powell has raised alarms over President Donald Trump's newly announced tariffs, received as "larger than expected," and warned that they could lead to more substantial economic fallout than anticipated. With higher inflation and slower growth predicted, Powell stressed the uncertainty surrounding the U.S. economy.

Delivering his message at a business journalists' conference in Arlington, Virginia, Powell referenced the Fed's challenging path in balancing its dual mandate of 2% inflation and maximum employment. The announcements sent market indexes plunging further, underscoring investor concerns.

Although Powell refrained from directly addressing the stock selloff or the Trump administration's policies, he focused on the necessity of maintaining well-anchored inflation expectations to prevent a persistent jump in price pressures. The evolving dynamics have kept the Federal Reserve cautious about any immediate policy adjustments.

(With inputs from agencies.)